Russia in Review

I. U.S. and Russian priorities for the bilateral agenda.

Nuclear security:

No significant developments.

Iran nuclear issues:

No significant developments.

NATO-Russia relations:

NATO Secretary-General Jens Stoltenberg has attended the inauguration of a military center in the Lithuanian capital, which was established to respond to a perceived new security threat from Russia. The NATO Force Integration Unit is one of six small new headquarters that opened this month in Bulgaria, Estonia, Latvia, Lithuania, Poland, and Romania. (RFE/RL, 09.03.15).
The US military has deployed two MQ-1 Predator reconnaissance drones and 70 airmen to Latvia on a training mission as part of U.S. efforts to reassure European allies the United States is committed to their security. (RFE/RL, 09.01.15).

Missile defense:

No significant developments.

Nuclear arms control:

No significant developments.

Counter-terrorism:

Russia has proposed to form an international coalition against extremism and terrorism, Russian President Vladimir Putin has said. "To this end we are holding consultations with our American partners, I have personally discussed this issue with U.S. President Obama on the phone and I have spoken about that with the Turkish president and the administration of Saudi Arabia," Putin told reporters on Sept. 4. The work is being done by defense departments, the president said. "If it is now impossible to organize the joint work of all the countries interested in fighting terrorism, so to say directly on the battlefield, then at least some coordination between them should be established," he said.(Interfax, 09.04.14).
The Islamic State’s so-called “province” in the Caucasus region has claimed responsibility for its first official attack since its was established earlier this year. (Long War Journal, 09.02.15).
Twenty-five people were detained in Russia's North Caucasus region in August for attempts to join the terrorist organization the Islamic State in Syria. Sergei Melikov, presidential envoy to the North Caucasus federal district, said that most of them were young people. (The Moscow Times, 09.03.15).
At military base in Ukraine, militants from Chechnya—veterans of the jihad in their own lands and, more recently, in Syria—now serve in what’s called the Sheikh Mansur Battalion. Some of them say they have trained in the Middle East with fighters for the so-called Islamic State, or ISIS. (Daily Beast, 09.04.15).
The US killed five “militants,” including several Uzbeks, in the first drone strike in Pakistan in nearly a month. (Long War Journal, 09.02.15).

Cyber security:

The United States is weighing sanctions on Russia, as well as China, after a spate of serious cyber attacks. The sanctions Washington is currently considering would not target suspected hackers of government data, but rather foreign citizens and firms believed responsible for cyber attacks on commercial enterprises, one official said. (Washington Post, 09.01.15).
Foreign spy services, especially in China and Russia, are aggressively aggregating and cross-indexing hacked US computer databases — including security clearance applications, airline records and medical insurance forms — to identify US intelligence officers and agents, US officials said. (LA Times, 08.31.15).
Russia is postponing a showdown with a handful of technology titans, including Facebook Inc., over installing data centers on Russian soil. (Wall Street Journal, 09.01.15).
In 2009, Eugene Kaspersky, co-founder of one of the world’s top security companies, told some of his lieutenants that they should attack rival antivirus software maker AVG Technologies N.V. by “rubbing them out in the outhouse,” one of several previously undisclosed e-mails shows. Kaspersky Lab has strongly denied the allegations. (Reuters, 08.30.15).

Energy exports from CIS:

Russia will not cut oil production, Arkady Dvorkovich, Deputy Prime Minister of the Russian Federation, said. “For Russia, given the structure of production, it's very difficult to cut supply artificially,” he said. (CNBC, 09.04.15).
The leaders of Russia and Venezuela, two of the countries hardest hit by plunging oil prices, met in China Thursday to discuss “possible mutual steps” to stabilize prices. (Wall Street Journal, 09.01.15).
Germany’s BASF SE and Russia's OAO Gazprom on Friday agreed to complete an asset-swap deal signed in December 2013 but called off late last year amid mounting political tensions between Russia and the West. (Wall Street Journal, 09.04.15).

Bilateral economic ties:

Russia’s United Wagon Company (UWC) and US-based global supplier of high-technology railroad production Wabtec Corporation have signed a 10-year contract on the export of foundry products for freight cars. (RBTH, 09.03.15).
US carmaker Ford’s Russian venture, Ford Sollers, opened a $275 million engine plant on Thursday, which will help make its Russian-produced vehicles less dependent on imported components and currency fluctuations. (Reuters, 09.04.15).

Other bilateral issues:

Russian President Vladimir Putin has said: “We have had different kinds of relations at different times, but whenever America and Russia’s higher interest demands it, we always found the strength to build relations in the best possible way.” (Brookings, 09.01.15.)
Russia calls on the United States to get back on track of an equal dialogue based on mutual respect, Russian Foreign Minister Sergey Lavrov has said. Lavrov said Russia’s cooperation with the West should develop based on “mutual respect of equal positions of each other, attention to mutual interests of each other and taking into consideration these interests . . . No other conditions are needed.” (Tass, 09.01.15).
Valentina Matviyenko, the speaker of Russia’s upper house of Parliament, denounced US sanctions banning her from attending a world conference and said the days of US superpower domination are nearing an end. (RFE/RL, 09.01.15).
The United States has levied new sanctions against a host of major Russian, Chinese and other companies, accusing them of violating embargoes on transferring weapons of mass destruction technologies to Iran, North Korea and Syria. Among the best known of the 23 companies and entities appearing on the blacklist were Rosoboronexport and MiG. (RFE/RL, 09.02.15, 09.03.15).
Moscow said Wednesday that it would respond in kind to the United States’ widening of sanctions imposed on Russia over the crisis in Ukraine, criticizing the move as straining relations and posing risks for international stability. The US Federal Register said Wednesday that Washington was adding 29 people to the sanctions list to tighten restrictions previously imposed on Russia. A total of 33 companies or other entities were cited. (RFE/RL, 09.02.15, Reuters, 09.02.15).
NASA’s top official Charles Bolden is asking Congress for more money, saying paying Russia to shuttle US astronauts to the International Space Station is a misguided investment that would be better spent in the United States. Congress has underfunded the White House’s Commercial Crew initiative by about $1 billion since 2010. A trip for a US astronaut to the space station aboard a Soyuz craft currently costs around $81 million. (RFE/RL, 08.29.15).
US prosecutors have expanded their probe of currency-market manipulation by some of the world’s largest banks to include the Russian ruble and Brazilian real. (Bloomberg, 08.31.15).
Russian nuclear-energy official Vadim Mikerin pleaded guilty Monday in a US federal court to conspiracy to commit money laundering for arranging more than $2 million in bribes to help US companies do business with the Russian state-owned nuclear-energy corporation. (WSJ, 09.01.15).
Respondents of a July survey by the state-owned Public Opinion Research Center in Russia were asked to name things that characterize the US for them: 15 percent said “It is a country of moral decay and widespread crime,” another 15 percent said “It is a country where there is no warmth in people’s relations,” and 12 percent said “It is a country with a high standard of living.” (Moscow Times, 08.31.15).

II. Russia news.

Domestic politics, economy and energy:

Russian President Vladimir Putin made a pitch Friday for greater investment in his country’s resource-rich Far East region. Speaking at the Eastern Economic Forum in the port city of Vladivostok, Mr. Putin said the Russian government would create the “best conditions for domestic and foreign investors to conduct business—so that in performance and return on capital, the Russian Far East can successfully compete with leading business centers.” (Wall Street Journal, 09.04.15).
Authorities in Russia’s Far East are handing out hectares of land free of charge in a bid to attract people to the vast region, which offers its sparse population a wealth of resources and a harsh climate. The offer is available to all Russian citizens, the only requirement is that people put the land to use. (Moscow Times, 09.04.15).
Russian gross domestic product dropped by 3.6 percent in the first seven months of the year, compared to the same period last year, Russia’s Economic Development Ministry said. (Moscow Times, 08.30.15).
Russia’s Deputy Finance Minister Alexei Moiseyev said Thursday that the economy will return to growth no earlier than in late 2015 or next year. (Wall Street Journal, 09.03.15)
Moody’s Investors Service is forecasting that the deep recession in Russia this year will extend into 2016 as a result of the big drop in commodity prices and currencies caused by China’s economic slowdown. (RFE/RL, 08.29.15).
The town of Beslan in Russia’s North Ossetia has begun three days of mourning to mark the 11th anniversary of a school hostage-taking that left 334 people dead, including 186 children. (RFE/RL, 09.01.15).

Defense and Aerospace:

Russian Defense Minister Sergey Shoigu said the military completed its preparations last week for the Center 2015 drills planned for September. The Center exercises are scheduled to feature every branch of the Russian armed forces. (IBS, 08.31.15).
The supersonic Tupolev Tu-160 is about to undergo a major upgrade, which will see 60 percent of its equipment replaced with top-end gear, including hypersonic missiles, improved avionics and electronics. (Sputnik, 09.02.15).
A Soyuz rocket carrying three crew has blasted off for the International Space Station. The spacecraft lifted off on schedule, carrying Russian cosmonaut Sergei Volkov, Kazakhstan’s Aidyn Aimbetov, and Andreas Mogensen from Denmark. (RFE/RL, 09.02.15).

Security, law-enforcement and justice:

Troops from Russia, Belarus and Serbia will practice fighting anti-government protesters — such as those who overthrew the Moscow-backed government in Ukraine last year — during joint exercises. The training will take place outside the southern Russian city of Novorossiysk in early September. (Moscow Times, 09.01.15).
Foreign ministers from Nordic and Baltic countries have called for the immediate release of Estonian security officer Eston Kohver, who was recently sentenced in Russia to 15 years in jail. (RFE/RL, 09.03.15).

Foreign affairs and trade:

Russian troops are fighting alongside pro-Assad forces in Syria, state television in Damascus and several reports have claimed. The video footage claimed to show Russian troops and a Russian armoured vehicle fighting Syrian rebels alongside President Bashar al-Assad’s troops in Latakia. Also a Twitter account linked to Jabhat al-Nusra, al-Qaeda’s Syrian branch, published images of what appeared to be Russian planes and drones flying over Idlib. The White House on Thursday said it was closely monitoring reports that Russia is carrying out military operations in Syria, warning such actions, if confirmed, would be “destabilizing and counter-productive.” While there is no indication about who or what Russia is targeting in its alleged military operation, it’s likely to be against the Islamic State group, given that the terror group openly admitted attacking a Russian military base in Dagestan on Wednesday. (Daily Telegraph, 09.03.15, International Business Times, 09.04.15).
Russian President Vladimir Putin on Friday said Syrian President Bashar al-Assad is ready to hold snap parliamentary elections and could share power with “healthy” opposition. (Reuters, 09.04.15).
Russian Foreign Minister Sergei Lavrov on Monday told the head of a major Syrian opposition bloc that the “the broad spectrum of the opposition” must unite to reach a resolution to the conflict, state media reported. Lavrov described such unification as a “prerequisite” for peace talks to advance to a resolution. (DPA, 08.31.15).
Russia has hosted the newly appointed US special envoy for Syria. Michael Ratney met with President Vladimir Putin’s special envoy to the Middle East, Mikhail Bogdanov, in Moscow on August 28. (RFE/RL, 08.28.15).
Russia is seeking to extend a United Nations measure on chemical weapons in Syria to cover suspected incidents of chemical weapons use in Iraq by the Islamic State group, Russia’s UN ambassador said on September 2. (RFE/RL, 09.03.15).
“The consolidated position of our countries is having a stabilizing effect on the international situation,” Russian Defense Minister Sergey Shoigu said during talks on Wednesday with Vice Chairman Fan Chanlong of the Chinese Central Military Commission. (Russia Today, 09.02.15).
Chinese president Xi Jinping said Thursday that China will be firm in sticking to the policy of developing its comprehensive strategic cooperative partnership and broadening all-round pragmatic cooperation with Russia. Xi made the remarks during a meeting with Russian president Vladimir Putin, who attended commemorations in Beijing to mark the 70th anniversary of the victory in the Chinese People’s War of Resistance Against Japanese Aggression and the World Anti-Fascist War. (Xinhua, 09.04.15).
President Vladimir Putin’s visit to China produced a clutch of new deals on Thursday, but failed to secure funding for vital infrastructure projects. Igor Sechin, one of Putin's close allies, said the deals had a combined investment potential of around $30 billion. But with joint Russia-China projects worth around $113 billion stalled or delayed it was what was not agreed that stood out. (Reuters, 09.03.15).
Russian President Vladimir Putin told media the sanctions over Ukraine had spurred a shift to China for Russian businesses and that “Russian-Chinese ties have reached probably their highest level in history and continue to develop.” (RFE/RL, 09.03.15).
Russia says Latvia’s refusal to allow Russian state news agency Rossia Segodnya to open a bureau in the Latvian capital, Riga, is a case of discrimination. (RFE/RL, 08.30.15).
The European Union has agreed to extended sanctions for another six months against Russian firms and individuals, as well as Ukrainian separatists, to maintain pressure on Moscow to carry out the Minsk cease-fire agreement. The asset freeze and travel bans were due to expire September 15. The sanctions target 150 people, including senior Russian advisors, lawmakers, and Ukrainian rebel leaders. (RFE/RL, 09.02.15).
Russian Agriculture Minister Alexander Tkachyov said Russia had seen a 10-fold decrease in the imports of embargoed food since the introduction of the Aug. 6 decree ordering the destruction of confiscated food. (Moscow Times, 09.03.15).
Russia has banned imports of all agricultural produce from Bulgaria as of Sept. 1 over forged certificates from the EU country, Russia’s agriculture watchdog said in a statement Thursday (Moscow Times, 09.03.15).
Fifty-eight percent of the people surveyed by the Levada Center believe that the embargo imposed on food from Europe and the US is effective and is now yielding positive political results, and Russia is now more respected in the world and its interests are taken into account more. (Interfax, 08.31.15).
Russia has dismissed as “populist” a French proposal to limit the use of the veto at the UN Security Council and said it would oppose it. (RFE/RL, 09.02.15).

Russia’s neighbors:

In Ukraine the ceasefire that was supposed to go into effect September 1 has since been broken by a number of small arms attacks by Ukrainian and Russian-backed separatist forces in the east, according to a report issued by the Ukrainian government. (Washington Post, 09.03.15).
After the leaders of France, Germany, and Russia spoke by telephone on August 29, French President Francois Hollande’s office said the three “strongly backed” the call for a complete truce from September 1. (RFE/RL, 08.29.15).
Ukraine is hosting naval military exercise in the Black Sea with NATO forces, involving 2,500 troops and some 150 military vehicles. The host nation of Sea Breeze 2015 has deployed 1,000 troops, nine warships and eight aircraft for the drill. The US has sent 1,000 troops as well as five warships, two submarines and six aircraft. The remaining 500 troops, six warships, three submarines and six aircraft were provided by Bulgaria, Germany, Greece, Italy, Romania, Turkey, the UK and the non-NATO nations Moldova and Sweden. (Russia Today, 08.31.15).
Ukraine’s National Security Council has approved a new military doctrine that declares Russia to be a military opponent and calls for the country to pursue NATO membership. (RFE/RL, 09.03.15).
The death toll from a blast outside Ukraine’s parliament rose to three on Tuesday, as police said that the man suspected of throwing a grenade during the demonstration was a volunteer fighter on leave from a unit fighting Russian-backed separatists in the country’s east. The Interior Ministry said more than 120 people were hospitalized, most of them police officers, but also a French reporter and several Ukrainian journalists. About 30 people were arrested, including the suspected grenade thrower. The violence came after Ukrainian deputies voted by 265 in favor of the first reading of a bill designed to give more autonomy to rebel-held areas. (Reuters, 08.31.15,Wall Street Journal, 09.01.15, Washington Post, 09.01.15).
Two parties in Ukraine’s governing coalition say that they won’t abandon the grouping despite a major dispute over a proposal to give more power to Ukraine’s regions, including the rebel-held east. Oleg Berezyuk, head of the Samopomich faction, said the group will “remain in the coalition in the role of opposition within the parliamentary majority.” A member of Poroshenko’s faction, Igor Kononeko, said the faction of former Prime Minister Yulia Tymoshenko would also remain in the coalition. The leader of Ukraine’s Radical Party, Oleh Lyashko, has announced his party is quitting the coalition government. RFE/RL, 09.01.15, RFE/RL, 09.03.15).
The parties of Ukrainian President Petro Poroshenko and Kyiv’s Mayor Vitaly Klitschko have merged ahead of local elections in October. (RFE/RL, 08.29.15).
US Vice President Joe Biden is criticizing pro-Russian separatists in Ukraine for threatening to take more territory and hold their own elections. Biden spoke to Ukrainian President Petro Poroshenko by phone on August 28. (RFE/RL, 08.29.15).
Two children in southwestern Ukraine have been paralyzed by polio, the first outbreak of the disease in Europe since 2010, the World Health Organization reported Wednesday. (Reuters, 09.02.15).
Top ratings agencies say they see the debt restructuring deal Ukraine struck with creditors this week as tantamount to a default. Fitch lowered the rating on Ukraine’s long-term public debt from “CC” to “C,” citing major losses for bondholders. (RFE/RL, 08.29.15).
Laura Seal, a Pentagon spokeswoman, said that the United States is in the process of supplying 3,000 radios with various levels of encryption to Ukrainian forces as part of the nonlethal military assistance the Pentagon started sending last year. (Washington Post, 09.01.15).
Russia’s Foreign Ministry says Moscow has expelled a Ukrainian diplomat in retaliation for Kyiv’s expulsion of a Russian diplomat. (RFE/RL, 09.01.15).
Before the war, the separatist regions were subsidized by Ukraine, with about $2.6 billion a year going to pensions and an additional $3.2 billion to coal subsidies. (New York Times, 09.02.15).
Kazakhstan and China signed 25 agreements worth $23 billion, aiming to move cooperation dominated by raw materials to products with greater added value, the Kazakh president’s office said on September 1. (RFE/RL, 09.02.15).
Uzbek President Islam Karimov has ruled out the establishment of any foreign military base in his country. (RFE/RL, 09.01.15).
In a surprise move, Georgia’s Prime Minister Irakli Garibashvili announced on September 1 that Foreign Minister Tamar Beruchashvili would be replaced by Economy Minister Giorgi Kvirikashvili. (RFE/RL, 09.01.15).
An Azerbaijani court has sentenced investigative journalist Khadija Ismayilova to 7 1/2 years in prison after convicting her on charges that rights groups have called retribution for her reports on corruption involving senior government officials. (RFE/RL, 09.01.15).

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